AC Milan vice-president Adriano Galliani has admitted they could not compete financially with Barcelona for Cesc Fabregas.
The midfielder completed a dream move back to his boyhood club from Arsenal on Monday after a protracted transfer saga.
While Barca were always his first-choice destination and Arsene Wenger finally relented to grant his wish, Milan had also been linked with a surprise swoop.
However, after seeing Fabregas rejoin the Catalan club in a deal worth around £35million, Galliani acknowledged that Milan were never truly in the hunt.
"Fabregas? He had too high a cost for us, but it is a generic problem for Italian football, we cannot compete with the costs they have in Spain," he told Sky Sport Italia.
"Fabregas could not come to us because of turnover."
Fabregas' arrival at Barcelona could have prompted the European champions to sell highly-rated midfielder Thiago Alcantara, and Galliani admits to making an approach.
However, he was rebuffed in his enquiry and will now have to turn his focus elsewhere.
"I have spoken with Thiago Alcantara's agent, Giovanni Branchini, who is in Forte Dei Marmi on holiday, but Barcelona don't want to sell him," said Galliani.
Galliani is still working hard in the transfer market ahead of the close of the window at the end of the month, but is happy with the attacking resources already at the San Siro.
He maintains that striker Antonio Cassano, who had been linked with a move to Genoa, will not be going anywhere this summer.
"There is no ongoing business with Genoa," Galliani explained. "Cassano remains still with us, along with Ibrahimovic, Pato, Robinho, Inzaghi and El Shaarawy to create a varied attack."
Galliani has also reiterated that there is no chance of Kaka returning to the club from Real Madrid.
"Kaka? He costs too much and to come to AC Milan he would cut his salary by more than what Fabregas has done to get to Barca," he explained.
"Kaka can move only in Spain. I'm sorry to disappoint the fans."